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IT Service Management

What is a service?

Scenario: ATMs and Internet Banking

In late 1980s, the banks introduced ATMs services with 24×7 access to withdraw cash. This reduced not only the long queues, but also provided the access after hours. This functionality was later enhanced to allow the customers to deposit cash. However, the customers still had to find the closest ATM machine to use the service and some of the ATMs had constraints on accepting only known cards for withdrawal. Thus, the functionality was developed with constraints. There was no guarantee that ATMs will stock cash 24×7.

Late 1990s, with the evolution of Internet and e-commerce use, banks offered further services like accessing accounts, paying bills, transfer money, making the purchase via web, accepting payments via web, etc; thereby increasing the utility. But faced with challenges such as transactions were not secured, Internet banking was not available all the time due to capacity issues, etc. Although, the service was fit for purpose but not fit for use. These challenges were later addressed by strong authentication technologies on internet banking sites and through ‘watch dog’ service provided by the bank on the transactions. This increased the customers’ confidence to the use of Internet banking, thus providing the accepatble level of Warranty.

Thus, the customers wants both – utility and an acceptable level of warranty. The banks provided the level of warranty by filling the cash in the ATMs few times a day, such that the chances of having an ATM run out of cash is minimized; providing the required level of security, availability and capacity.

Thus the value to the customer is created by the two components:

Utiliy is the functionality offered by a product or service to meet a particular need. Utility is about what the product or service does and determining if the product or service is ‘Fit for Purpose’.

Warranty is the promise or guarantee that a product or service will meet the agreed requirements. Warranty is about how the utility is delivered to the customer. or is the service ’Fit for Use’ i.e. service is availablewhen needed, in suffcient capacity, and with required continuity and security.

The figure shows that the value is created only when both Utility and Warranty are satisfied